Charges against Edward Fitzgerald

• 19 felony counts of using untrue statements in the purchase or sale of a security

• 17 felony counts of grand theft

• 14 felony counts of issuing checks with insufficient funds with the intent to defraud

• Eight felony counts of theft from an elder

Source: Orange County District Attorney's Office

He had been through three recessions in his nearly 30 years as a yacht broker. Even when times were tough, he had survived. So when the economy began to suffer in 2007, he didn't think twice – he would survive.

But Edward Fitzgerald was wrong.

For the past five months, Fitzgerald has been sitting in Orange County Jail in Santa Ana following his arrest and extradition from Florida in mid-May. He is accused of using his company, Dana Island Yacht Sales and Charters, to steal $1.5 million from 26 investors between 2007 and 2009 before emptying his bank accounts and disappearing.

Fitzgerald said what happened was a result of his wife's death, the economic collapse and the need to keep his workers employed and clients in their boat slips.

“Those factors converged in a perfect storm of events,” he said in an interview at the jail. “They led me to make decisions I thought at the time were fine and I could work out.”

Investors have described emails from Fitzgerald about an investment opportunity to buy a yacht that he could then resell at a profit, claiming he had an investor with $50,000 but needed a matching investment. Fitzgerald would promise profits within a month from the flip, but the original investor never existed and those who did invest – including Fitzgerald's friends and employees – lost their money, authorities said. Bob Jarvis, one of Fitzgerald's five salesmen, told the Orange County Register in 2009 that he lost $21,000.

Fitzgerald's common-law wife died in October 2008 after nine months in a hospital, and he says he was distracted and didn't devote as much time to his company as he should have. The economy hit the yacht industry hard, and profits weren't being turned as quickly as investors hoped and they got agitated, he said. As his business struggled, its debt began to snowball, he said.

“I always intended to pay people back in full,” Fitzgerald said. “But that was my life's work. I needed to keep all that going.”

Fitzgerald has gone through a series of pretrial hearings, including two this week, but no trial date has been set.

The number of hearings is unusual, but with more than 20,000 pages in documents for Fitzgerald's attorneys to review, the court has been lenient to allow them time to prepare their case, said Sean O'Brien, the deputy district attorney who is prosecuting the case.

Fitzgerald said he didn't steal the money. He said his lawyers can prove that all the money from his investors stayed within the company and was used for loan payments and bills. When he was arrested, he was unemployed and living on food stamps, he said – a stark contrast to rumors of him fleeing to Hawaii with more than $1 million.

Fitzgerald acknowledges he left Orange County in July 2009 in the middle of an investigation. He said at the time that he left for a short vacation to visit his in-laws in Texas. After he received threats from angry investors, he decided to delay his return to Orange County, he said. Though he knew there was an investigation, he believed his contracts were legal and he was more concerned with his inability to pay his loans, Fitzgerald said.

He visited friends in Florida and decided to stay there. He got a Florida driver's license and worked some fast-food jobs.

He says he wasn't hiding – that he easily could have been traced. If he had wanted to hide, he said, he could have fled to the Caribbean and used his captain's license to find work.

His brother Dan said authorities never contacted him about Edward Fitzgerald's whereabouts.

Edward Fitzgerald, center, is escorted shortly after landing in Orange County in May following his extradition from Florida. FILE PHOTO COURTESY OF ORANGE COUNTY SHERIFF'S DEPARTMENT
Edward Fitzgerald COURTESY OF FLORIDA.ARRESTS.ORG
Orange County Sheriff's Department investigators carry items from the Dana Point Harbor offices of Edward Fitzgerald's Dana Island Yacht Sales and Charters in July 2009. JEBB HARRIS, REGISTER FILE PHOTO

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